Register
A stock has a beta of 1.2. Suppose the expected market risk premium (EMRP) is 6% and the risk-free rate is 1%. What is this stock's expected return according to the CAPM
91.4k views
1 vote
A stock has a beta of 1.2. Suppose the expected market risk premium (EMRP) is 6% and the risk-free rate is 1%. What is this stock's expected return according to the CAPM

User Neil Mix
by
8.2k points

1 Answer

6 votes

Answer:

7%

CAPM = 1% + [6% - 1%](1.2) = 1% + 6% = 7%

A stock has a beta of 1.2. Suppose the expected market risk premium (EMRP) is 6% and-example-1
User Yoannes Geissler
by
8.4k points
← Prev Question Next Question →

Related questions

Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.5m questions

12.2m answers

Other Questions

Who was Adam Smith ? Anybody?
What can turn igneous rock into sediment?
In what way did the GI Bill contribute to the growth of professional and white-collar jobs ? A.by providing US laborers with new job-training programs B.by giving US veterans assistance to purchase a new
What is meant by data mining ?
What is the best way to describe a stock market?
Link Copied!